Why a Renovation Loan is Better Than a HELOC!
Reason #1 — Have you shopped for HELOC’s lately? They are tough to find. The people who used to buy them in the secondary mortgage market have stopped because they are poor performing assets in a declining market. For that reason many of the major banks are completely out of the HELOC market. They don’t offer them at all any more and if they do the loan to value is capped at a level that makes it hard to get enough money to do the renovations your home needs.
Reason #2 — Renovation loans are based on AFTER REPAIR VALUE instead of the value that your home is currently worth. HELOC’s don’t consider the value of your home when the repair is finished, renovation loans do.
Reason #3 — Renovation loans are first lien mortgage products. You only have ONE loan! Gone are the days of making two mortgage payments. One payment goes to one lender. Easy and convenient.
Reason #4 — Moving to a different home that needs repair? Good luck getting a first mortgage let alone a second to renovate. Lenders of traditional loans will not lend on homes in disrepair, but renovation lenders are not concerned with the current condition of the property. Renovation lenders are only concerned with the after repair condition of the property.
In this market there is no better loan than the FHA 203K or Fannie Mae Homestyle renovation loan if you are considering purchasing the foreclosure down the street or renovating your current residence. One loan based on after repair value at an affordable fixed rate. FHA 203K and Fannie Mae Homestyle renovation loans were built for this market.
Green Renovation Specialist